Mortgage Calculator | Monthly Payment
Calculate monthly mortgage payments, total interest, and amortization schedule.
+ Optional: extra payment, taxes & insurance
What Is the Mortgage Calculator | Monthly Payment?
This Mortgage Calculator computes your monthly principal-and-interest payment, generates a complete amortisation schedule for every month of the loan, and analyses the impact of extra monthly payments on total interest paid and payoff date. Optionally add property tax, home insurance, and PMI to see your true total monthly housing cost.
- ›Full amortisation schedule: see exactly how much of each payment goes to principal vs interest, and the remaining balance, for every month of the loan term.
- ›Extra payment analysis: enter any extra monthly amount to instantly see total interest saved and months cut from the loan.
- ›Down payment sync: enter either dollar amount or percentage, both fields update each other automatically.
- ›Quick term selector: 10, 15, 20, and 30-year buttons for fast comparison.
- ›Optionals panel: add property tax, home insurance, and PMI rate to calculate total monthly housing cost.
Formula
| Variable | Definition | Example |
|---|---|---|
| M | Monthly payment ($) | $2,528/mo |
| P | Loan principal = home price − down payment | $400,000 − $80,000 = $320,000 |
| r | Monthly interest rate = annual rate ÷ 12 | 6.5% ÷ 12 = 0.5417%/mo |
| n | Number of monthly payments = years × 12 | 30 × 12 = 360 |
| (1+r)ⁿ | Compounding factor | (1.005417)³⁶⁰ = 7.0138 |
| LTV | Loan-to-Value = loan ÷ home price × 100% | 80% (20% down) |
How to Use
- 1Enter the home price and down payment in dollars, or set the down payment percentage directly.
- 2Enter the annual interest rate as a percentage (e.g. 6.5 for 6.5%).
- 3Select the loan term using the quick buttons (10, 15, 20, 30 years) or type any value.
- 4Click Calculate to see your monthly payment, total paid, and total interest.
- 5For total housing cost, expand the optional panel and add property tax, insurance, and PMI.
- 6To see savings from extra payments, enter an amount in the "Extra monthly payment" field.
- 7Click "Show amortisation schedule" to see the complete month-by-month payment breakdown.
Example Calculation
Example, 30-year fixed at 6.5%
Extra payment impact, $500/month extra
PMI and the 20% down payment rule
Understanding Mortgage | Monthly Payment
How a Fixed-Rate Mortgage Works
A fixed-rate mortgage has a constant interest rate and monthly payment for the life of the loan. Although the total monthly payment never changes, the split between principal and interest shifts dramatically over time. In the early months, most of your payment is interest; by the end, most is principal. This is called amortisation, the gradual repayment of principal over time.
In month 1 of a $320,000 loan at 6.5%, the interest portion is $320,000 × 0.5417% = $1,733. Only $289.65 of the $2,022.65 monthly payment reduces the principal. By month 300, less than $600 of each payment is interest and over $1,400 reduces principal. The amortisation schedule shows this shift for every single month.
- ›Fixed-rate: predictable payment, immune to interest rate changes after origination.
- ›ARM (adjustable-rate): lower initial rate, but resets periodically, payment can increase.
- ›Interest-only: minimum payment covers only interest, balance unchanged until principal payments begin.
- ›30-year vs 15-year: lower monthly payment on 30-year, but roughly double the total interest paid.
The Power of Extra Mortgage Payments
Making extra payments directly reduces the principal balance, which reduces future interest charges. Because mortgage interest compounds monthly on the remaining balance, even a small regular extra payment has a large cumulative effect over time. The calculator shows exactly how much interest and time you save for any extra payment amount.
On a 30-year $320,000 mortgage at 6.5%, adding just $200/month extra saves over $60,000 in interest and cuts more than 5 years from the loan. Adding $500/month saves ~$130,000 and cuts ~10 years. This is one of the highest guaranteed returns available, reducing a 6.5% debt is equivalent to earning 6.5% risk-free, after tax.
- ›Extra payments should be directed to principal, specify this when submitting the payment.
- ›Even one extra full payment per year (the "13th payment trick") significantly reduces total interest.
- ›Bi-weekly payments result in 26 half-payments = 13 full payments per year, same effect.
- ›Check your mortgage terms for any prepayment penalties before making extra payments.
Loan-to-Value Ratio and PMI
The Loan-to-Value (LTV) ratio is the loan amount divided by the appraised home value, expressed as a percentage. LTV = $320,000 / $400,000 = 80%. LTV above 80% typically triggers Private Mortgage Insurance (PMI), which protects the lender if you default. PMI costs approximately 0.3%–1.5% of the loan amount per year, added to your monthly payment.
You can request PMI cancellation once your LTV reaches 80% through regular payments and/or home appreciation. Under the US Homeowners Protection Act, lenders must automatically cancel PMI at 78% LTV based on the original amortisation schedule. Refinancing or getting a new appraisal if your home has appreciated can also eliminate PMI earlier.
Total Monthly Housing Cost (PITI)
Lenders qualify borrowers based on total housing cost, abbreviated PITI: Principal, Interest, Taxes, and Insurance. The front-end debt-to-income (DTI) ratio is PITI ÷ gross monthly income. Most conventional lenders prefer a front-end DTI of 28% or less and a total DTI (including all debts) of 36–43% or less. Use the optional inputs in this calculator to include property tax, home insurance, and PMI for an accurate PITI figure.
Frequently Asked Questions
How is a monthly mortgage payment calculated?
The monthly payment formula for a fixed-rate mortgage is: M = P × r(1+r)ⁿ / [(1+r)ⁿ − 1], where P is principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12).
What is an amortisation schedule?
An amortisation schedule is a complete table showing each monthly payment split into principal and interest, plus the remaining balance after each payment. This calculator generates the full schedule for any loan term.
- ›Early payments: mostly interest (very little principal reduction)
- ›Late payments: mostly principal (interest charges are much smaller)
- ›The total principal column always sums to the original loan amount
- ›The total interest column shows your total borrowing cost
The schedule is useful for understanding exactly when you will reach 80% LTV (for PMI cancellation) and how extra payments change the payoff trajectory.
Should I choose a 15-year or 30-year mortgage?
The choice involves a trade-off between monthly affordability and total interest cost:
- ›30-year: lower monthly payment (~40% less), more flexibility, but nearly double total interest paid.
- ›15-year: higher monthly payment, but much less total interest and equity builds faster.
- ›15-year rates are typically 0.5–0.75% lower than 30-year rates, compounding the savings.
- ›If you can comfortably afford the higher 15-year payment, the savings are substantial.
Many financial advisers suggest the 30-year mortgage for the lower payment obligation, investing the difference, but this requires discipline to actually invest the difference, and depends on investment returns exceeding the mortgage rate.
What is PMI and when can I remove it?
PMI (Private Mortgage Insurance) is required by most lenders when your down payment is less than 20% (LTV > 80%). It protects the lender if you default. PMI typically costs 0.3%–1.5% of the loan per year.
- ›Request cancellation at 80% LTV: write to your servicer with evidence (original schedule or new appraisal)
- ›Automatic cancellation at 78% LTV: required by law under the Homeowners Protection Act (US)
- ›
- ›VA and USDA loans: no PMI at any LTV, a major benefit for eligible borrowers
How much does one extra payment per year save?
On a typical 30-year mortgage, making one extra full payment per year (applied to principal) saves approximately 4–5 years of payments and tens of thousands in interest. For a $300,000 loan at 6%:
- ›One extra annual payment: saves ~$42,000 in interest, pays off ~4.5 years early
- ›Bi-weekly payments (26 half-payments/year = 13 full): saves ~$43,000, ~5 years early
- ›$200/month extra: saves ~$60,000, ~8 years early
- ›$500/month extra: saves ~$100,000+, ~12 years early
What is the debt-to-income ratio for mortgage qualification?
Lenders use two DTI ratios to qualify borrowers:
- ›Front-end DTI (housing ratio) = PITI ÷ gross monthly income. Conventional limit: 28%
- ›Back-end DTI (total debt ratio) = (PITI + all debt payments) ÷ gross income. Conventional limit: 36–43%
- ›FHA loans allow higher DTIs: up to 31% front-end, 43% back-end (with compensating factors, higher)
- ›A lower DTI means more borrowing capacity and better loan terms
Example: $6,000/month gross income. Front-end DTI limit of 28%: maximum PITI = $1,680/month. This sets an upper bound on how much home you can afford.
What is the difference between interest rate and APR on a mortgage?
The interest rate is the cost of borrowing the principal, it determines your monthly payment. APR (Annual Percentage Rate) includes the interest rate plus upfront fees (origination fees, points, mortgage broker fees, etc.), expressed as an annual percentage of the loan. APR is always equal to or higher than the note rate.
Use the interest rate to calculate monthly payments and amortisation. Use APR to compare the true total cost across different loan offers, a loan with a lower rate but higher fees may have a higher APR and cost more overall.